Stop thinking that programmatic is the future of online advertising

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"Offline" data — things like voice command and in-store shopping — are stil important factors in consumer decision-making.

Baidu founder and CEO Robin Li introduces the new AI-powered, voice-controlled digital assistant "Duer" in Beijing

Many say that programmatic reached a tipping point in 2015, because for the first time last year, programmatic transactions surpassed non-search digital ad spending. That’s an important milestone, but there’s still a big gap for marketers who want to automate the ad buying process. The customer journey — especially for considered purchases — rarely happens entirely online.

Our purchasing habits are not only becoming more digital — they are becoming more omnichannel.

Take the example of buying insurance. The process can range from mildly complicated to completely confusing. No matter what, it’s nearly impossible to obtain a policy without speaking to someone on the phone. If you’re signing up for something expensive or customized — whether it’s a mortgage, an engagement ring or a tux — you’re probably not doing it alone on your couch.

Everyone is touting programmatic as the next great thing in digital advertising, but I caution people to take a broader view. Only when marketers incorporate "offline" data — things like voice command and in-store shopping — will they be able to make the best bids and serve customers ads that are relevant every time.

Here’s how I see it happening:

Conversations will become intelligent

With new tools to "listen" to what you say when you’re on the phone with sales or customer service reps, marketers will get smart about what happened when someone called — not just that they picked up the phone. When this type of intelligence is integrated into other automation software, marketers can be smarter about the types of ads they choose to bid on. They can focus on ads that continue to drive the journey forward, based on each customer interaction, not just the ones that happen online. For instance, if a customer purchases their satellite TV subscription over the phone, the next ad that they see will offer an upgrade, not an incentive to sign up.

Programmatic will feed into AI

Voice-command mobile technology is still imperfect, but it’s booming. Baidu, China’s version of Google, launched the world’s most advanced voice-recognition software in November, and is now focused on creating meaningful conversation between humans and devices, according to MIT Tech Review. Nearly every smartphone already includes a virtual assistant, and they are becoming commonplace not just in our pockets but also in our homes and cars.

As artificial intelligence becomes more sophisticated, programmatic will feed into our smart devices. Apple is already focused on improving contextualized search via Siri. We are not far from Cortana and Alexa fine-tuning their responses to your questions based on your most recent video view, search or in-app purchase.

Beacons will get smarter

Even as e-commerce surges, in-store shopping still accounts for more than 90 percent of retail purchases. This skews even higher for considered purchases, like cars or washing machines. Retailers realize they need to make the physical shopping journey as personalized and integrated as one online, and they’re adopting technology to create better experiences and more opportunity for upsell.

Beacons — in-store devices that communicate with a shopper’s smartphone — are starting to change in-store commerce. They can do anything from provide intel into how customers move throughout the store to send mobile coupons to passers by. This is just the beginning. With programmatic plugged in, beacons will get even smarter. Marketers will know what drove customers to visit their brick-and-mortar location (was it an email or display ad? How many interactions did it take?), and automate advertising post-purchase to keep them coming back.

Our purchasing habits are not only becoming more digital — they are becoming more omnichannel. As people continue to switch between devices and online and off, it’s essential and inevitable that actions consumers take beyond the click — whether that be using our voice to communicate with virtual assistants and sales reps or stepping inside a store — will become deeply integrated into the programmatic stack.